“America Great Again”… Will Gold Stocks Recover From That Greatness?

The ratio of gold stocks (GDX) to broad US large caps (SPY) has work to do to recover.

However, recover I believe it will. Before the election the GDX/SPY ratio had made a nice bottoming pattern and base. Then just before the election it broke up and out from the base. Then? “America great again” = counter-cyclical sector for the next economic downturn, bad again (or at least in correction again).

Now GDX/SPY is grappling for a low, which I think it may be finding (regardless of whether it rallies or pulls back further nominally). I could be wrong about that because it is Santa season within a large speculative bubble exhibiting blow-off dynamics. But I am pretty secure in the belief that this mess is going to flop before long in 2025. When that happens, when the economy shows enough of its cracks, gold stocks should regain footing and take another relative leg upward.

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